RICHMOND, B.C. - Catalyst Paper has conditionally agreed to sell its closed Snowflake paper mill in Arizona and its shares in Apache Railway for US$13.5 million to an affiliate of a private U.S. investment firm.
The buyer is an investment entity organized by Hackman Capital that intends to operate the railway. The transaction, announced Tuesday by the Canadian pulp and paper producer, is subject to court approval.
The Hackman-led bid was selected Monday after a court-supervised bidding process. It was above a $12-million stalking horse bid from MLR Ventures that Catalyst had selected as a starting point for the auction.
A U.S. court hearing is scheduled for Wednesday to consider the sale and the deal is expected to close in the first quarter of 2013.
Hackman Capital is a privately-held asset manager headquartered in Los Angeles. It owns, through affiliated entities, more than 100 facilities throughout the United States. It also participates in equipment acquisitions, dispositions and liquidations.
Catalyst says the Hackman bid is supported by the Town of Snowflake, about 275 kilometres northeast of Phoenix, and various local interests.
"We are pleased that this transaction has progressed efficiently and that the community's interests have been considered through the process and in the successful bid," said Kevin Clarke, Catalyst Paper's president and chief executive.
"While paper manufacturing is part of Snowflake's past, this transaction puts the asset on a path to a new future that can continue to bring value to the region."